Calculate current cash debt coverage ratio, Financial Management

Assignment Help:

Calculate Current cash debt coverage ratio:

Financial statements for Delta Company are presented below:

 

Delta Company

Balance Sheet

December 31, 2012

                        Assets                                                             Liabilities & Stockholders' Equity

Cash                                                        $ 40,000            Accounts payable                   $ 20,000

Accounts receivable (trade)                      35,000            Bonds payable                            50,000

Buildings and equipment                           150,000           Common stock                           65,000

Accumulated depreciation-                                            Retained earnings                         60,000

     buildings and equipment                       (50,000)                                                          $195,000

Patents                                                       20,000           

                                                               $195,000           

 

 

Delta Company

Statement of Cash Flows

For the Year Ended December 31, 2012

Cash flows from operating activities

         Net income                                                                                                                $60,000

         Adjustments to reconcile net income to net cash

              provided by operating activities:

                     Increase in accounts receivable (trade)                            $(16,000)

                     Increase in accounts payable                                                 8,000

                     Depreciation-buildings and equipment                               15,000

                     Gain on sale of equipment                                                     (6,000)

                     Amortization of patents                                                           2,000                  3,000

Net cash provided by operating activities                                                                             63,000

Cash flows from investing activities

         Sale of equipment                                                                             12,000

         Purchase of land                                                                              (25,000)

         Purchase of buildings and equipment                                            (48,000)

Net cash used by investing activities                                                                                   (61,000)

Cash flows from financing activities

         Payment of cash dividend                                                               (15,000)

         Sale of bonds                                                                                    30,000

Net cash provided by financing activities                                                                             15,000

Net increase in cash                                                                                                             17,000

Cash, January 1, 2012                                                                                                         23,000

Cash, December 31, 2012                                                                                                 $40,000

 

Additional Information:  Selected accounted balances on Jan 1, 2012 were as follows: 

         Bonds Payable on Jan 1, 2012                                                       $20,000

         Total Assets on Jan 1, 2012                                                           112,000

         Number of common shares outstanding all year                             30,000

         Net Sales for 2012                                                                        $150,000

Instructions: 

Calculate the following for Delta Company and show your work. (You may need to compute some of the numbers you need before you could calculate some of the ratios below).

a.   Current cash debt coverage ratio

b.   Cash debt coverage ratio

c.   Free cash flow

d.   Current ratio

e.   Profit margin on sales  

f.    Payout Ratio

g.   Debt to total assets

h.   Rate of return on assets

i.    Earnings per share

j.    Asset turnover

k.   Receivables turnover


Related Discussions:- Calculate current cash debt coverage ratio

Distinguish between a credit card and a debit card, QUESTION (a) What a...

QUESTION (a) What are the main benefits of E-Banking to customers and banking institutions? (b) Internet Banking products and services are of two primary types, informationa

Explain significance of the additional funds needed (afn), Explain the sign...

Explain the significance of the term additional funds needed. While the pro forma balance sheet is completed, total assets and total liabilities and equity will hardly match.

Understanding financial metrics and business risk, Controlling is an essent...

Controlling is an essential management function as efficient control mechanisms ensure that the performance of the company increases over time through the incorporation of feedback

Financial Analysis Management, I need this in the next 24 hours urgently. I...

I need this in the next 24 hours urgently. If you can accept this, you must be meeting the deadline with strictly no delays or full payment refund is needed

Apv capital budgeting framework helpful for foreign capital, What makes the...

What makes the APV capital budgeting framework helpful for analyzing foreign capital expenditures? The APV framework is a value- additivity method. As international projects fr

Securities analysis, 7. Bill Peters is the investment officer of a $60 mill...

7. Bill Peters is the investment officer of a $60 million pension fund. He has become concerned about the big price swings that have occurred lately in the fund’s fixed income sec

Objective of wealth maximization, Q. The main rationale for the objective o...

Q. The main rationale for the objective of wealth maximization is that it shows the most efficient use of the society's economic resources and therefore leads to a maximization of

Determine the circumstances is a warrant’s value high, Under what circumsta...

Under what circumstances is a warrant’s value high?  Explain. A warrant’s value would be high while the stock prices, time to expiration, and/or expected stock price volatility a

Financial crisis , a)  Tonddu plc is expected to report record earnings of ...

a)  Tonddu plc is expected to report record earnings of £120m next year.  It has grown rapidly over the last few years, the growth has been achieved by maintaining a high level of

Regional banks, Regional Banks Large banks like First Norwest, Chicago,...

Regional Banks Large banks like First Norwest, Chicago, Mellon and Crocker function regionally at the national level in a fashion same to money center banks. Regional banks ser

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd